MAS to let Singapore dollar rise: Analysts

MAS to let Singapore dollar rise: Analysts

Analysts polled by Bloomberg say the MAS will let the Singapore dollar stay on a 'modest and gradual' appreciation path

PUBLISHED: APRIL 8, 9:37 PM

SINGAPORE — The Monetary Authority of Singapore (MAS) will probably keep favouring currency gains at its policy meeting next Monday as it seeks to curb inflation while supporting economic growth, Bloomberg News reported on Tuesday.

All 23 analysts polled by Bloomberg said the MAS, which uses the exchange rate rather than interest rates as its main policy tool, will let the Singapore dollar stay on a “modest and gradual” appreciation path.

“The external side of things is still pretty positive for Singapore. The inflation risk is still slightly to the upside for the MAS and that’s why they’ll keep the currency appreciation stance,” said HSBC Asian currency strategist Dominic Bunning.

Singapore’s inflation rate will probably quicken to 2.8 per cent this year from 2.4 per cent previously, showed an MAS survey of professional forecasters last month. The authority may also widen the currency’s trading band, reflecting “increasing confidence” in the global recovery, DBS economist Irvin Seah said.

The MAS adjusts the Singapore dollar’s pace of rise or fall against an undisclosed trade-weighted basket of currencies by changing the slope, width and centre of the exchange rate band. A steeper slope allows a faster rate of change, a broader width allows for more volatility, while a higher or lower centre reflects structural economic fundamentals.


- wong chee tat :)